THIRD SECTION
DECISION
AS TO THE ADMISSIBILITY OF
Application no. 45619/99
by ITC (Isle of Man), P.S.W.H. and A.G.S.
against the United Kingdom
The European Court of Human Rights (Third Section), sitting on 29 February 2000 as a Chamber composed of
MrJ.-P. Costa, President,
SirNicolas Bratza,
MrL. Loucaides,
MrP. Kūris,
MrW. Fuhrmann,
MrsH.S. Greve,
MrK. Traja, judges,
andMrsS. Dollé, Section Registrar,
Having regard to the above application introduced on 23 December 1998 and registered on 22 January 1999,
Having deliberated, decides as follows:
THE FACTS
The first applicant, ITC, is an Isle of Man registered company. The second applicant was until 1988 the managing director of the first applicant. The third applicant was at all material times the director of the first applicant. The second and third applicants are British citizens, born in 1948 and 1937 respectively. The second applicant lives in Solihull, England, and the third applicant lives in Girona, Spain.
The applicants are all represented before the Court by Mr M. Maroney, a lawyer practising in the Isle of Man, United Kingdom.
The facts of the case, as submitted by the applicants, may be summarised as follows.
A number of companies and partnerships collectively known as “Barlow Clowes” had been engaged in the operation of investment schemes since 1976. However, it was only in 1985 that the Department of Trade and Industry (“DTI”), the responsible regulatory authority for the investment and other sectors, issued Barlow Clowes with a first licence. The DTI renewed the licence in October 1986 and in October 1987.
Barlow Clowes collapsed in early 1988 with substantial losses to investors.
From early 1884 onwards there was substantial and compelling evidence that Barlow Clowes' investment schemes were fraudulent. In the applicants' submission, the DTI had been advised of the dangers to investors posed by Barlow Clowes' investment activities. The sources included the London Stock Exchange and the Treasury. Of particular importance to the applicants is the fact that in July and August 1987 the London Stock Exchange drew the DTI's attention to the existence of a relationship between Barlow Clowes and a British Virgin Islands incorporated company, Ryeman Limited. The first applicant provided Ryeman Limited with a professional administration service. None of the applicants was ever contacted by the DTI at that stage about their association with Ryeman Limited.
No action was taken by the DTI on receipt of the negative reports on Barlow Clowes and, as stated above, the company's licence was renewed in October 1986 and in October 1987.
The DTI's decision to grant and then renew the Barlow Clowes licence in the face of the evidence against the company was severely criticised in a report of the Parliamentary Commissioner for Administration (“PCA”) published on 19 December 1989. The PCA found that Barlow Clowes would not have continued in business beyond the end of 1984 if it had been properly regulated by the DTI. The PCA's conclusion was that the DTI was guilty of “significant maladministration”.
The DTI's handling of Barlow Clowes was also criticised in a report submitted in July 1995 to the Secretary of State by Inspectors appointed under the Companies Act 1985. In the Inspectors' conclusion, the DTI “did not demonstrate in relation to Barlow Clowes the characteristics of a competent regulatory authority.” Although there was some criticism of the applicants in this report, there was no finding that they had been dishonest as regards knowledge of the origins of investors' funds.
Between July 1991 and February 1992 the main associate of Barlow Clowes (P.C.) stood trial on and was convicted of various charges relating to the conduct of the investment scheme.
Following a recommendation in the PCA's report to the effect that investors in Barlow Clowes be compensated, the DTI set up a scheme under which investors who agreed to assign to the DTI their rights in relation to their investments with Barlow Clowes would receive compensation. Ninety per cent of investors accepted this offer with the result that the DTI became the principal beneficiary of any litigation aimed at recovering their investment funds.
Barlow Clowes International Limited (“BCI”), a company registered in Gibraltar, belonged to the Barlow Clowes group and held investors' monies in funds identified as Portfolios 28, 68, 33 and 39. On 8 June 1988 the Supreme Court of Gibraltar ordered BCI's liquidation and appointed H. and R. as joint liquidators. On 10 June 1988 J. replaced H. as joint liquidator and, on the same date, both H. and J. were also appointed as joint receivers and managers of the portfolios cited, as well as of any other such funds promoted by BCI.
The applicants insist that BCI was never placed in receivership and that the powers of H. and J. to act as Receivers were limited to the scope stated in the court's Order, which was restated by the Gibraltar Supreme Court as including powers to:
“ ... issue and prosecute ... in the name of [BCI] and / or in their own names in their capacity as Receivers (whether on behalf of all or any of the investors or otherwise) any proceedings in any jurisdiction which the Receivers may think expedient or desirable in relation to the collection, recovery and management of any of the assets comprised in the receivership or otherwise in relation to the receivership ... .”
The representatives of J. and H., the Receivers, made enquiries with the second and third applicants about the affairs of Ryeman Limited soon after their appointment. According to the applicants, they co-operated fully with these enquiries. However, J. asserted in the press that the money belonging to Barlow Clowes had been improperly transferred to the Isle of Man and named the applicants in this connection. Subsequent press reporting on the subject had a damaging effect on the applicants' business, as well as their professional and personal reputations. The first applicant ceased to trade by 31 December 1989 as a result of persistent adverse publicity.
On 21 July 1988 the Receivers petitioned the High Court of Justice of the Isle of Man (“the Manx High Court”) for an ex parte order against inter alia Ryeman Limited and the first applicant on the basis that the sum of GBP 7,000,000 belonging to BCI investors had been misappropriated. ITC was joined as a party for the purpose of obtaining documents and no substantive relief was sought against it.
On 22 July 1988 the Manx High Court made an interim order restraining Ryeman Limited from removing any of its assets from outside its jurisdiction or otherwise disposing of its assets. The Order applied to the second and third applicants since they were deemed to be agents of Ryeman Limited on account of the fact that they were joint authorised security signatories on Ryeman's bank accounts in the Isle of Man. The court also ordered that the first applicant's solicitors permit the Receivers or their representatives to enter their offices and to search for and remove any documents relating to Ryeman Limited. Under the terms of the Order the Receivers were authorised to use any such documents for the purposes of their intended action against, inter alia, Ryeman Limited and the first applicant, and for investigating, tracing or making proprietary claims in other jurisdictions.
By summons issued on 8 August 1988, the Receivers commenced an action (CH 1988/27) against Ryeman Limited, the first applicant and its solicitors and four banks. The only claim against ITC was for discovery of documents.
On 16 August 1988 the Manx High Court granted the Receiver's ex parte request for an interim order against a certain C. who had been closely connected with the running of Barlow Clowes. It was alleged by the Receivers that C. owned and controlled Ryeman Limited and must have appreciated that the funds which he received either directly or through Ryeman Limited were the proceeds of the misapplication of BCI's investors' funds. The Receivers further alleged that a sum of money belonging to BCI investors had been transferred on 3 March 1987 from the first applicant's account to Ryeman Limited's account on the instructions of the second and third applicants.
Also on 16 August 1988 a copy of the Manx High Court's Order of 22 July 1988 was served on the first applicant's solicitors. Pursuant to the terms of the Order the first applicant's solicitors delivered up documents relating to Ryeman Limited and the applicants. The applicants maintain that they did not receive copies of any documents either seized or handed over voluntarily until May 1995, and that the final copies were not returned until 14 January 1998.
On 16 September 1988 the Manx High Court made an Order in favour of the Receivers and on an ex parte application by them. The Order empowered the Receivers to provide the Serious Fraud Office with documents obtained from the first applicant's solicitors. On the same date the court amended its Order of 22 July 1988 so as to stipulate that any information disclosed under that Order be only used against the first applicant or its solicitors with the leave of the court. According to the applicants the terms of the amended Order indicated that one of the purposes for which the Receivers obtained the Order of 22 July 1988 was to obtain documents for use against the first applicant.
On 25 April 1990 the Manx High Court made two Orders on the application of the Receivers. Both Orders permitted the Receivers to disclose the documents which they had obtained from the first applicant's solicitors to DTI officials, provided the latter gave an undertaking as to the purposes for which the documents would be used. The Orders were later replaced by a new Order dated 21 October 1990 which committed a DTI official to undertake that any information lawfully disclosed by the Receivers would not be used in any proceedings against, inter alia, the first applicant without the leave of the court, and that no such information would be communicated to any other DTI official unless the latter gave a similar written undertaking.
On 15 November 1990 the first applicant and its solicitors applied for an Order striking out action CH 1988/27 for want of prosecution. On 21 November 1990 the Manx High Court, with the consent of the parties, ordered that the proceedings be stayed, subject to respect by the Receivers of the above-mentioned undertaking.
Between November 1990 and March 1993 neither the Receivers nor the DTI took any further steps in action CH 1988/27 or in other proceedings against the applicants.
On 3 March 1993 the Receivers issued a summons against the first applicant in the Manx High Court in which they claimed damages for breach of constructive trust on the part of the first applicant in relation to the sum of GBP 1,886,415 which it had received and transferred on the instructions of the second and third applicants to the account of Ryeman Limited on 3 March 1987. This action was listed as Action CLA 1993/43.
On 16 June 1993 the Receivers commenced another action (Action CLA 1993/120) in the Manx High Court against the first applicant in which they claimed damages for breach of constructive trust in relation to the sum of GBP 7,000,000 received by Ryeman Limited on 17 June 1987.
On 24 February 1994 the Manx High Court granted the Receiver's ex parte application to join the second and third applicants to the proceedings against the first applicant.
Summonses were eventually served without prior notice on the first and second applicants on 28 February 1994, almost seven years after the impugned transactions of 3 March and 17 June 1987 and over five and a half years after the Receivers first commenced proceedings against the first applicant. The Receivers were granted leave to serve a summons on the third applicant out of the jurisdiction of the Manx High Court since the third applicant, on account of the adverse publicity to which he had been subjected as a result of the Receivers' investigation, had taken up residence in Spain. The summons was served on the third applicant in January 1995.
On 29 April 1994 the Receivers served a consolidated statement of case following the decision of the Manx High Court to join Actions CLA 1993/43 and CLA 1993/120. The consolidated statement of case contained allegations dating back to events which had occurred in May 1986.
On 19 July 1994 the first and second applicants applied for the consolidated action to be struck out on grounds of abuse of process and want of prosecution. They also requested that the Order of 24 February 1994 adding the second and third applicants to the action be set aside since the six-year limitation period contained in section 21 (3) of the Manx Limitation Act 1984 had expired.
On 20 and 21 March 1995 the Manx High Court heard argument on the applicants' striking out application. On 4 May 1995 His Honour Deemster Corrin ruled that the application was refused. Nevertheless, the judge stated that he was sympathetic to the plight of the applicants given that the subject matter of the 1993 proceedings could well have been initiated against them in 1988. However, he expressed the view that:
“... the plain fact is that the 1988 proceedings have never been adjudicated upon and the 1993 proceedings specify, for the first time, the substantive claims against [the applicants]. This court therefore, in its discretion, is not prepared to strike out the 1993 proceedings. ...”.
In the judge's opinion the period of inaction by the Receivers, between 3 March 1993 and 28 February 1994, amounted to a period of inordinate and inexcusable delay. However, with reference to the rules of court, the judge concluded that he had no option but to hold that a plaintiff was permitted to wait for twelve months after commencing an action before serving a summons or even informing the latter that the summons had been issued. Furthermore, he observed that it was likely that there had been a breach of undertakings as to the use to be made of the documents obtained from the first applicant's solicitors, since they may well have been used to prepare the consolidated statement of claim. However, the judge did not regard the breaches in a serious light.
On 8 July 1996 the Manx High Court heard two applications arising out of the fact that the Receivers had incorrectly described themselves as Receivers and Managers of BCI in the summonses initiating Actions CLA 1993/43 and CLA 1993/120, since BCI had never in fact been placed in receivership. Although resisted by the applicants, His Honour Deemster Corrin granted the Receivers leave on 9 July 1996 to amend the consolidated statement of claim in order to correct the errors in the summonses.
On 26 July 1996 His Honour Deemster Corrin dismissed the applicants' application to set aside the Order of 24 February 1994, on the grounds that section 21(3) of the Manx Limitation Act 1984 did not apply to the claims against the second and third applicants.
On 31 May 1995 the applicants appealed to the Manx Court of Appeal against the judge's ruling on the striking-out application and, on 8 August 1996, against the rulings handed down on 9 and 26 July 1996.
Over a period of seven days, between 1 December 1997 and 14 January 1998, the Manx Court of Appeal heard argument on the merits of the applicants' appeals including a new contention that the consolidated action could not be maintained unless the DTI, the principal beneficiary of the action, was a party to it.
On 31 March 1998 the Manx Court of Appeal dismissed the applicants' appeals. It found that His Honour Deemster Corrin had jurisdiction to rectify the error in the description of the Receivers in the initial summonses and that he had properly exercised his discretion to correct a bona fide misdescription of which the applicants were well aware and which had caused them no prejudice. On the limitation point, the Court of Appeal reviewed the relevant domestic and Commonwealth authorities, as well as legal literature in this area, including that on constructive trusts and fraud on pre-existing trusts, and concluded that the action against the second and third applicants was not statute-barred as alleged.
As to the applicants' argument that the delay in bringing the proceedings justified dismissal of the action for want of prosecution, the Court of Appeal noted that the applicants conceded that the only period of delay to be considered was that between 3 March 1993 and 28 February 1994, that this delay related only to the first applicant and that the second and third applicants did not contend that there was any inordinate or inexcusable delay in serving summonses on them. The Court of Appeal stated:
“It seems to us plain that [the first applicant] was not served with all convenient speed. Such summonses should have been served promptly and manifestly they were not. We think it beyond any doubt that the delay relied on by the [applicants] was
both inordinate and inexcusable. Deemster Corrin found that the 'the period of inaction by the [Receivers] between 3 March 1993 and 28 February 1984 amounted to a period of inordinate and inexcusable delay'. We agree with him save only that (a) in respect of the second summons against the [first applicant] the period could only begin on 16 June 1993 when it was issued and (b) in respect of both summonses the period of such delay should be reduced to reflect a relatively short time during which the summonses could have been served with all convenient speed.”
The Court of Appeal next considered whether in the case of the first applicant such delay could prejudice its right to a fair hearing. The Court of Appeal took note of the applicants' submissions that the recollection of the second and third applicants as to the events in 1987 would be impaired with the result that the value of their oral testimony at the hearing would be diminished. In addition, the person responsible for the affairs of Ryeman Limited and who was at the centre of one of the impugned transactions had died in 1992. In consequence a vital witness had been lost through the delay. The Court of Appeal rejected these submissions. It considered inter alia that on the facts of the case the issues would largely turn on documentary evidence and that recollections as to whether the transactions, which were substantial, were regarded as proper were most unlikely to be diminished. Accordingly, the Court of Appeal, agreeing with the conclusion of His Honour Deemster Corrin on this issue, was satisfied that a fair hearing was possible.
The Court of Appeal also rejected the applicants' argument that the 1993 action should be struck out on the ground that it could have been brought within the 1988 action. In the Court of Appeal's view the High Court judge was correct to rule that, with respect to the first applicant, the 1988 action only related to the production of documents and that the second and third applicants were never parties to that action.
The Court of Appeal further ruled that the delay, even if inexcusable, could not be considered an abuse of process. In addition, the court found that while there had been a breach of the undertakings entered into by the Receivers in that the documents obtained from the first applicant had been used to formulate the statement of case in the proceedings, the breach was not of a serious nature and that no significant prejudice would be caused to the applicants since they would in any event be obliged to disclose all their documents on discovery. Finally, the Court of Appeal rejected the applicants' submission that the DTI was the assignee of the litigation and, given their absence from the proceedings, the action was improperly constituted. In the court's opinion, and with reference to the Order made by the Supreme Court of Gibraltar, the Receivers had properly brought the proceedings in a representative capacity on behalf of all investors, not just those who had assigned their rights to the DTI, and the Receivers operated with the authority to compromise the action, again on behalf of all investors.
On 30 June 1998 the Privy Council, without giving reasons, refused the applicants' application for leave to appeal.
The second and third applicants renewed their application for leave to appeal to the Privy Council on the strength of an English Court of Appeal judgment delivered on 21 July 1998 wherein it was stated that the Manx Court of Appeal appeared to have misunderstood one of the decided cases on which it relied in interpreting the limitation point under section 21 (3) of the Manx Limitation Act 1984.
On 2 November 1998 the Privy Council, without giving reasons, refused the second and third applicants' renewed application.
COMPLAINTS
The applicants complain under Article 6 § 1 of the Convention that they were deprived of their right to a fair hearing within a reasonable time in the determination of their civil rights and obligations. The applicants state in this connection that as a result of the Receivers' delay that there has still been no determination of the latter's serious and widely reported allegations that they had misappropriated sums of money totalling GPB 8,886,415.
Again with reference to Article 6, the applicants further maintain that the Receivers' delay has had an adverse impact on their prospects of obtaining a fair hearing in respect of the allegations against them. The applicants complain in this connection that witness recollection of the events of 1986-87 has inevitably diminished. Furthermore, a key witness has died in the meantime.
The applicants complain about the impartiality of one of the judges who sat on the hearing of their appeal to the Privy Council. They submit that since the judge in question had been extensively involved in related proceedings conducted in the English courts and made rulings against their interests, it must be concluded that before the Privy Council they were denied a fair procedure before an impartial court, in breach of Article 6 § 1 of the Convention.
The applicants further allege that they are victims of a violation of Article 14 of the Convention taken in conjunction with Article 6 § 1 thereof. They maintain in this connection that the opportunities to defend themselves in the Isle of Man courts are not as advantageous as those available to defendants tried in English courts. They insist that the action brought against them is conducted by the Receivers and not by the DTI. In their submission, the DTI is in reality their real opponent in the case, and that the Receivers have frustrated their attempts to cite the DTI before the Isle of Man courts.
THE LAW
1. The applicants complain that the excessive delay by the Receivers in bringing proceedings against them infringes the reasonable-time requirement of Article 6 § 1 of the Convention and prejudices their right to a fair hearing in consequence. Article 6 § 1 provides as relevant:
“1. In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing within a reasonable time by an independent and impartial tribunal established by law (...)”
(a)Alleged breach of the reasonable-time requirement
The applicants state in this connection that there has still been no determination on the Receivers' serious and widely reported allegations that in 1987 they had misappropriated sums of money totalling GPB 8,886,415. They rely on the fact that His Honour Deemster
Corrin in the Manx High Court criticised the delay in the proceedings, finding that there was no reason for the Receivers' inactivity in the period between July 1988 and March 1993 since the Receivers could have proceeded against them in 1988 when they initiated Action CLA 1988/27. Furthermore, the Manx Court of Appeal, agreeing with the Manx High Court Judge, found that the Receivers were guilty of inordinate and inexcusable delay in the period between March 1993 and February 1994.
The applicants underscore the speed with which the criminal proceedings were concluded against P.C. They draw attention to the fact that even though they were found by the DTI Inspectors in 1995 not to have been aware that they were dealing in Barlow Clowes funds the DTI, which had been roundly condemned by the Parliamentary Commissioner of Administration in his December 1989 report, persisted in backing the Receivers' case against them.
In the applicants' submission the reasonable-time requirement must be calculated as of 21 July 1988, the date on which the dispute between them and the Receivers began by the latter's application for an ex parte order to the Manx High Court. That application led to the making of the Order of 22 July 1988 which empowered the Receivers to seize documents from the first applicant's solicitors and specifically referred to the second and third applicants by name. The applicants observe that at that stage the Receivers never considered them innocent parties to the proceedings and indeed took the view that they might frustrate the investigations into Barlow Clowes. That concern was clearly reflected in the terms of the court order of 15 September 1988 which the Receivers successfully applied for ex parte and which prevented the first applicant's solicitor from contacting or advising it. In addition, in a petition dated 16 September 1988, again ex parte, the Receivers set out serious allegations against all three applicants. However, rather than commencing proceedings the Receivers successfully opposed the first applicant's attempt in November 1990 to have the 1988 proceedings stuck out, won a stay of proceedings and over three years later set in motion two sets of further proceedings without giving notice to the applicants.
The applicants insist that the second and third applicants were closely identified by the Receivers as from July 1988 with the first applicant and were suspected of wrongful conduct. Even if the second and third applicants had not been formally made parties to Action CH 1988/27, a judgment in those proceedings against their company delivered within a reasonable time would have been a determination of their innocence as officers of that company.
The applicants further contend that the period alone commencing with the issue of the summonses in Action 1993/41 against the first applicant was a breach of the reasonable time requirement, as was found by the domestic courts.
The applicants submit that even supposing that the point of departure for the calculation of the reasonable time requirement of Article 6 § 1 in respect of the first applicant is taken to be 3 March 1993, the applicants maintain that it is nevertheless the case that between that date and 28 February 1994 the Receivers concealed from them that the first applicant was the subject of legal proceedings, which amounts to a separate breach of Article 6 § 1.
The Court notes at the outset that the main litigation between the applicants and the Receivers has not yet reached the stage of hearing. The applicants have not provided the Court with details as to whether the proceedings have been listed for hearing in the Isle of Man courts. However, the absence of final judgment on the subject matter of the principal litigation does not prevent the Court from examining the applicants' contention that there has been a breach of the reasonable-time requirement in view of the Receivers' alleged delay in prosecuting the action.
The Court further observes that the applicants are facing a civil claim which the Receivers have brought against them in order to recover damages for breach of constructive trust in respective of transactions to which they were party in 1987. The proceedings do not give rise to the determination of criminal charges against the applicants.
Furthermore, the Court accepts that the proceedings arising out of the applicants' motions to dismiss the Receivers' case against them involved the determination of their “civil rights”, within the meaning of Article 6 § 1 of the Convention. In its opinion, the exercise by the applicants of their procedural rights to have the case struck out was so closely connected to the main litigation that the proceedings before the Isle of Man courts, and ultimately before the Privy Council, must be considered to attract the application of the guarantees contained in Article 6 § 1 of the Convention (see, mutatis mutandis, the Robins v. the United Kingdom judgment of 27 September 1997, Reports of Judgments and Decisions 1997-V, p. 1809, §§ 28-29).
Against this background the Court will assess whether the alleged delay in determining the case against the applicants discloses any appearance of a breach of the reasonable-time requirement contained in Article 6 § 1. In accordance with the principles established in its case-law, it will have regard to the length of the period impugned and examine this period from the standpoint of the complexity of the case, the conduct of the parties and what was at stake for the applicants (see, among many other authorities, the above-mentioned Robins judgment, p. 1810, § 33).
The applicants stress that time should be taken to run as from 21 July 1988, the date on which the Receivers initiated the proceedings which given rise to Action CH 1988/27. The Court does not accept that contention. It notes that both the Manx High Court and the Manx Court of Appeal were faced with a similar argument and dismissed it. There does not appear to be any reason to contradict the domestic court's finding that the first applicant was only peripherally involved in the first action brought by the Receivers, mainly as regards the surrender up of documents to the Receivers. No substantive relief was claimed from the first applicant in that action and the second and third applicants were never parties to it. It must also be noted that on 21 November 1990 the proceedings in the action were in fact stayed with the consent of the first applicant.
In the Court's assessment, the principal proceedings were only brought against the first applicant on 3 March 1993 when the Receivers issued a summons against it claiming damages for breach of constructive trust in respect of the March 1987 transaction, and against the second and third applicants on 28 February 1994 when they were joined as co-defendants to Action CLA 1993/120. It was only from those dates that the applicants could in reality claim that they were being sued by the Receivers and would have to defend in court the allegations made against them.
The Court notes that the domestic courts found that the Receivers were guilty of a period of “inordinate and inexcusable” delay between the time when the summonses initiating Actions CLA 1993/43 and CLA 1993/120 were issued against the first applicant and the time when the summonses were actually served on that applicant. The Court does not consider that the inactivity of the Receivers during this period assists the applicants' argument.
In the first place, the fact that a specific period of delay was found to be “inordinate and inexcusable” from the standpoint of domestic law does not of itself mean that there was a breach of the reasonable-time requirement prescribed by Article 6 § 1 of the Convention. Whether or not that requirement was respected has to be viewed in a broader perspective, especially the reasonableness of the length of the proceedings considered as a whole.
Secondly, the second and third applicants conceded before the Manx Court of Appeal that their position was not affected by the length of this period since the summonses were served on them on 28 February 1994, four days after the Manx High Court gave the Receivers leave to join them to the actions against the first applicant.
Thirdly, the criticised period must be seen in the light of the measures which the applicants subsequently took to have the consolidated action struck out and the consequences which those measures had on the progress of that action. On 19 July 1994 they made their application to the High Court, which held a hearing on its merits on 20 and 21 March 1995, and rejected it on 4 May 1995. The applicants appealed on 31 May 1995. The hearing on that appeal had to be stayed pending the outcome of another application which the applicants had introduced before the High Court challenging the status of the Receivers. The High Court dismissed that application on 26 July 1996, and the applicants appealed against that decision on 8 August 1996. The Manx Court of Appeal dismissed the applicants' appeals on 31 March 1998 following a lengthy hearing. The applicants sought on two occasions in 1998 to take an appeal to the Privy Council.
On the understanding that the period to be considered began on 3 March 1993 as regards the first applicant, and on 24 February 1994 as regards the second and third applicants, the Court considers that the delay in prosecuting the action thereafter cannot be imputed to the authorities. The applicants have not criticised the domestic courts' handling of the proceedings. Indeed they rely heavily on the fact that the Manx courts admonished the Receivers for their delay in serving the writ on the first applicant. The Court does not dispute the importance of what was at stake for the applicants. However, for that very reason the applicants cannot complain of the delay in proceeding with the main action since a substantial part of that delay results from the interlocutory proceedings which were intended to fend off the threat of the principal action. Although the applicants were fully entitled to exercise their procedural rights so as to have the case against them dismissed (see the Pretto and Others v. Italy judgment of 8 December 1983, Series A no. 71, § 34), they cannot have been oblivious to the consequences which this entailed for the listing of the main action.
For the above reasons the Court considers that the applicants' assertions do not disclose any appearance of a breach of the reasonable-time requirement. It concludes that their complaint is inadmissible as being manifestly ill-founded pursuant to Article 35 §§ 3 and 4 of the Convention.
(b)Prejudicial impact of delay on the prospects of obtaining a fair hearing
The applicants further maintain that the Receivers' delay has had an adverse impact on their prospects of obtaining a fair hearing in respect of the allegations against them. The applicants complain in this connection that witnesses' recollection of the events of 1986-87 has inevitably diminished and that a key witness has died in the meantime. Even if the issues were mainly to be resolved on the basis of documentary evidence, the applicants insist there is still a need for witnesses' to remember the meaning of a document and the process which led to its creation, bearing in mind the very many, indeed unquantifiable, volumes of documents in the possession of the DTI and the Receivers.
The applicants depose in addition that the Receivers disregarded the terms of the undertakings which they entered into in Action CH 1988/27 in respect of the use which could be made of the documents obtained from the first applicant's solicitors. Without obtaining the court's consent, the Receivers used those documents for the purposes of pursuing in Actions CLA 1993/43 and CLA 1993/120 claims against the first applicant which could have been pursued in Action CH 1988/27. In addition, despite the fact that the Manx High Court had ordered in May 1995 that documents obtained from them be returned within a period of fourteen days they were not in fact returned until 14 January 1998.
The Court recalls that the main litigation is still pending before the domestic courts. It cannot on that account speculate on the outcome of the proceedings, less so on the question whether the proceedings will be conducted in a manner which respects the requirements of a fair procedure. It confines itself to noting that the latter issue was fully argued before the Manx High Court and the Manx Court of Appeal, neither court being of the opinion that any prejudice had been caused to the applicants' prospects of obtaining a fair hearing. As to the applicants' assertion that the domestic courts condoned the improper use made by the Receivers of documents protected by the terms of court undertakings, the Court considers that this matter must also be seen in the context of the fairness of the proceedings as a whole and it cannot, as this stage, pronounce on this issue from the standpoint of Article 6 § 1 of the Convention.
The Court would also in this context reiterate its earlier remarks that the applicants, by initiating proceedings to have the main action struck out, must be taken to have been aware of the possible implications which this might have for the hearing of that action.
For the above reasons the Court concludes that this complaint is premature and as such manifestly ill-founded pursuant to Article 35 §§ 3 and 4 of the Convention.
(c)Alleged breach of the impartiality requirement
The applicants also complain that one of the judges who sat on their failed appeal to the Privy Council on 30 June 1998, Lord Hoffman, was hostile to their application. They state that the same judge, then Mr Justice Hoffman, had been involved in interlocutory proceedings in a case involving the Barlow Clowes issues taken by the Receivers against inter alia Ryeman Limited and C. in 1988. The applicants submit that the Receiver's representative in those proceedings swore affidavits before Mr Justice Hoffman which clearly refer to the impeached transactions, to the first applicant and to the Receiver's statement of case in the Isle of Man proceedings. In addition, not only did Mr Justice Hoffman use Manx evidence to make his orders, the Manx High Court in turn also made use of evidence obtained in the proceedings before Mr Justice Hoffman in furtherance of the Isle of Man proceedings against the applicants. The applicants complain on that account that they have been prejudiced by reason of Lord Hoffman having sat in the Privy Council appeal, when he had acted as a judge at first instance on interlocutory matters relating to the same issues, albeit in different proceedings, and made orders knowing the allegations against the applicants.
In further support of their complaint under this head, the applicants also draw attention to the fact that Lord Hoffman sat in hearings as a judge of first instance in claims brought by the Barlow Clowes Liquidators and the Receivers of Barlow Clowes investors against, inter alia, Ryeman Lmited as from August 1988 onwards.
The applicants submit that in the leave to appeal proceedings before the Privy Council on 30 June 1998 the plaintiffs were the same plaintiffs represented by the same solicitors who were involved in the six hearings between 1 August 1988 and 23 April 1990 before Mr Justice Hoffman. Those hearings resulted in the making of orders against defendants whose activities formed the core of the allegations before the Privy Council. For Lord Hoffman not to disclose his prior involvement in the case amounts, in the applicants' submission, to a serious breach of the objective limb of the impartiality requirement contained in Article 6 § 1 of the Convention.
The Court recalls that the existence of impartiality for the purposes of Article 6 § 1 must be determined according to a subjective test, that is on the basis of the personal conviction of a particular judge in a given case, and also according to an objective test, that is ascertaining whether there are ascertainable facts which may raise doubts as to his impartiality (see, mutatis mutandis, the Fey v. Austria judgment of 24 February 1993, Series A no. 255-A, p. 12, § 28).
As to the subjective test, the applicants do not dispute the personal impartiality of Lord Hoffman when he heard their application for leave to appeal in the Privy Council.
As to the objective test, the Court notes that the applicants' concerns are prompted by their knowledge that Lord Hoffman had been involved in related litigation in the English courts and thereby became familiar with the proceedings brought against them by the Receivers. The applicants consider that there are legitimate grounds for fearing the impartiality of the stance he took in rejecting their application for leave to appeal to the Privy Council, especially since he had made interlocutory orders in the English courts which ran counter to their interests in the Isle of Man litigation.
The Court observes that, in the context of a criminal hearing, it has held that the mere fact that a judge has also made pre-hearing decisions in the case cannot be taken as in itself justifying fears as to his impartiality (see, for example, the Hauschildt v. Denmark judgment of 24 May 1989, Series A no. 154, p. 22, § 50; the above-mentioned Fey judgment, p. 12, § 30, and the Padovani v. Italy judgment of 26 February 1993, Series A no. 257-B, p.p. 20‑21, § 28). By analogy with the approach taken in those cases, the Court will have regard to the scope and nature of the measures taken by Lord Hoffman in the English courts. It observes in this respect that the proceedings in which Lord Hoffman sat were separate from the litigation before the Isle of Man courts, even if they were relevant to that litigation. Furthermore, the measures taken by him were in the nature of interlocutory orders issued without reference to the final determination to be made in the proceedings, either in the English courts or in the Isle of Man courts. The Court must also have regard to the considerable period of time which elapsed between the date when Lord Hoffman had been involved in the related litigation and the date when he sat as a member of the Privy Council to consider the applicants' application for leave to appeal.
The Court concludes that in the circumstances there is no objective justification for the applicants' fears on this matter. It concludes that the complaint under this head is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention and must be rejected in accordance with Article 35 § 4.
2. The applicants also invoke Article 14 of the Convention in conjunction with Article 6 thereof. Article 14 provides:
“The enjoyment of the rights and freedoms set forth in the Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”
In the applicants' submission the non-participation of the DTI in the Isle of Man proceedings places them at a distinct disadvantage compared to litigants in their position before the English courts. They assert that the DTI is the financial backer of the case and is in reality being shielded by the Gibraltar court-appointed Receivers. As assignee of Barlow Clowes investors' rights, the DTI is the main beneficiary of the proceedings. However, the absence of the DTI from the proceedings makes it impossible for them to obtain discovery of documents relating to its dealings with bodies, such as the Treasury and the London Stock Exchange, in connection with developments in the Barlow Clowes affair at the material time, and to demonstrate the extent of the DTI's knowledge of events in the years 1984 to 1988 and, in particular, its serious maladministration over that period.
According to the applicants, the respondent Government issued over six hundred writs in 1991 in England in which the DTI was the claimant by assignment. The proceedings which result from those writs make it possible for defendants in the English courts to exercise full adversarial rights with respect to the DTI and to discredit the DTI on the strength of inter alia the PCA's report, an advantage which they in the Isle of Man proceedings are denied. By way of example, the applicants aver that their position is weakened because an application to obtain Government documents through the Receivers acts as a barrier between the applicants and their real opponent in the action, the DTI.
The Court recalls that it has found the applicants' complaint about the prejudice caused to the fairness of the hearing though delay premature, and as, such manifestly ill-founded. In its opinion the arguments which the applicants now advance are equally speculative and for that reason the Court cannot pronounce on them. In any event the Court observes that the applicants took this issue on appeal. The Manx Court of Appeal ruled that the Receivers acted as the representatives of all BCI investors with full authority to compromise the action on their behalf.
The Court would further observe that the applicants have not substantiated that the DTI have deliberately refrained from involvement in the Isle of Man proceedings in order to restrict their defence rights.
The Court concludes that the complaint under this head is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention and must be rejected in accordance with Article 35 § 4.
For these reasons, the Court, unanimously,
DECLARES THE APPLICATION INADMISSIBLE.
S. DolléJ.-P. Costa
Section RegistrarPresident
Full & Egal Universal Law Academy